by Dr. Scott Brown, Education Director
Saturday, March 28, 2009: Issue #966
In some ways it seems like we just arrived at the Investment U Conference; on the other hand, it feels like we’ve been here for weeks… Because we couldn’t possibly have learned so much in just a few days.
If you’re just joining us, we’re at the Renaissance Vinoy in St. Petersburg, Florida. We’re enjoying the sunny weather, the hospitality, and a small fleet of high performance cigar racing boats in the bay. Their crews have been all over the place in the last day or so.
And if you’ve been “tuning in” for the last few days, you know that I’ve been all over the place in the last few days as well. I’m your “eyes and ears” during our 11th Annual meeting.
And today is no different. It’s why I’m listening to Louis Basenese break down our current situation, and what we can do about it…
Taking a Look Back on the Crash
In one of the best explanations I’ve heard so far, Louis Basenese broke down the crash of 2008, and why it broke so many “rules.” It’s important to understand because traditional “safe havens” surprised so many investors by not performing as expected, shaking confidence.
There were other things in play as well. Regulations like the ‘uptick rule’ changed. And it was made worse by the collapse of some key Wall Street institutions that ran segments of the credit market. Mortgage assets, which numerous institutions had on their books, took a nosedive as reckless risk evaluation collided with collapsing home values.
It was a confluence of events few could have predicted.
Louis, or ‘Lou’ as friends know him, made sense of these events before his talk turned to some of the companies that are on his radar.
On of them is Stonemor Partners L.P. (Nasdaq: STON). This company makes caskets and owns cemeteries. Stonemor also sells burial plots to people and has entered the pet cemetery market where the margins are much more significant.
And while this “recession-proof” business has cash and a steady demand – it’s trading at just over $10 a share – Lou cautioned against buying right now. Their quarterly report comes out on March 31. Wait and see how the financials look and if they maintain their dividend payment.
Market Threats And Offshore Opportunities
Thomas Fischer, Sr. Vice President of Jyske Global Asset Management is from Denmark – you know the country with the most wicked, killer, pastries on the planet. He started in foreign exchange as a trader for 22 years. He presented some valuable advice for “newbies” on Forex, cautioning that while currency trading is fun – you have to be careful on a trading platform that gives you 100:1 leverage (standard contract) or more.
He’s seen time and time again that people trading with $5,000 will make 2 or 3 trades that are good. Then they get overconfident and lose it all.
Thomas recommends starting in the EUR:USD, saying that 35% of all trades are in this currency. This makes it the most liquid. He’s bearish on the Euro, because he believes the next thing to blow up is eastern Europe.
Like Alex Green he’s bullish on the stock market for the long term. He explains that cash holdings are at 1990 highs here in the US… that’s $8.85 trillion, earning less than 1%! That’s a ton of money waiting to flood into the market.
Thomas recommended some intriguing opportunities including a EUR bond BBB yielding 15%. Get the full details on his currency trading recommendations, as well as his European perspective on transferring your trading accounts offshore, here.
Thomas Fisher put it this way, ”The currency market doesn’t correlate with stock or bond markets. You can always find a currency that you can own outright that will outperform another currency. If you pick your currencies wisely.”
And as our friends from Everbank pointed out, for the beginning investor, there is plenty of good, easily accessible research out there on the fundamentals that can give us an idea of the potential direction and current yields for currencies. For example, here.
Another Great Suggestion
We’ve heard from dozens of experts and specialists over the past few days. In addition to their personal viewpoints and opinions on how to prosper in good times and bad, we’ve also been getting some great tips on asset protection.
One, from Byron King at Outstanding Investments, was about storing your assets in bank lock-boxes…
If you own gold, make sure you get an account co-signer at the bank for any lock-box. If you die and don’t have a co-signer, the bank will not open it without a revenue service representative present. It’s an easy way to keep the IRS from hassling your grieving family members.
If your interesting in getting the full conference audio files, and all of the little tips that we’ve heard, go here.
Natural Resource Prospecting
Rick Rule is always a popular speaker at our conferences, and I’m happy to say he doesn’t disappoint. In this session he talked about the risks and rewards involved with resource exploration.
I was surprised to learn that only 1 of 5,000 prospects becomes a mine. This is why exploration can be so costly. However, the upside potential can be huge. Returns on successful efforts are often as high as $1,000 in profit for every $1.00 invested.
According to Rick, the only statistically rational way of to speculate in mineral exploration is to develop a portfolio of exploration stocks called “prospect generators“.
Rick explains is better on the recording, but prospect generators are corporate assemblages of very high quality explorations and entrepreneurs. They employ specialized technical or commercial skills to generate exploration concepts. Rick emphasizes, “It’s important to recognize that exploration is a knowledge business like research & development in technology.“
He added that the best due diligence is done by mining companies – not by investors or brokerage firms who often have a conflict of interest in their recommendations.
Rick also talked about three companies he’s personally invested in.
Rick Rule is an expert on natural resource investing, and one of the most knowledgeable “prospectors” I know. He won’t give you a stock suggestion if he wouldn’t personally put money in it. The audio files will have more on the three he likes.
Questions Answered
Throughout the conference I’m often approached with questions on a session or two. One question in particular stuck out today.
Oxford Club Chairman Circle Member Harry J. comes up to me as I’m pouring a cup of tea. He remarks, “What do I do if I’ve already got a million dollar stock portfolio?“ I looked at him and replied…”Well, you celebrate!“
Turns out Harry used the principles and portfolios we recommend in the Oxford Club… he showed me the numbers to prove it. I think the best thing he can do is to educate others… pass on the wealth of knowledge, as they say. That’s what we’re trying to do with our new Investment U course, “How to Create Your $1,000,000 Portfolio From Scratch.”
It teaches you, your kids, and your grandkids the nuts and bolts of the investment approach we use at the Oxford Club. It will allow you to do exactly what Harry did.
We’ll have more on that soon. In the meantime, I’m rushing back into another session now. Stay tuned for our closing day’s wrap-ups and panel discussions on Monday.
It all starts with education,
Dr. Scott Brown
P.S. If you’ve been unable to attend this year, you won’t miss a beat by ordering the audio files of the conference. They will be ready very soon – downloadable audio recordings in MP3 format. You’ll also get the complete list of favorite picks Alexander Green, Rick Rule and Lou Basenese talked about at this event, for half the price you normally would pay-only $79.
To get more information, go here for information on the audio files.
- The Investment U Conference Wrap-Up: “Don’t Miss Your Million Dollar Opportunity”
- The Investment U Roving Reporter: Day 4 – Conference Report
- The Investment U Roving Reporter: Live at the Conference
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One Response to “The Investment U Roving Reporter: Day 3 – Live at the Conference”
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March 28th, 2009 at 9:27 pm
I have looked in STON but don’t feel their business is profitable enough to be a good investment.
It will be interesting to see whether they will maintain their dividend, but my guess is it doesn’t seem likely.
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